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Learning outcomes

After studying this course, you should be able to:

  • demonstrate an understanding of the importance of representation, interpretation and formalisation in relation to ICT and managing knowledge, giving appropriate examples

  • demonstrate an understanding of the concept of a ‘community of practice’ in relation to ICT, giving appropriate examples

  • demonstrate an understanding of the main functions that ICT can play in helping to manage knowledge, giving
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2 The models in action: what counts is what works?

As noted at the start of Session 1, the models of change can be both explanatory and normative. As explanations, each corresponds to a different theoretical tradition. So do you just pick the one that seems most compelling? Or do different theories help explain different kinds of phenomena? The answer suggested here closely follows the work on metaphors by Gareth Morgan (1986), who sets out a number of different models of organisations (some of which map on to those outlined here). Morgan arg
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1.2 The machinery of government: policy as rational planning

Much of the policy literature is imbued with a rather mechanical conception of change: ideas about ‘pulling levers’ to make things happen, or about applying different ‘tools’ or ‘instruments’, all conceive the policy system as something like a machine itself. Component parts – the government departments, regulatory bodies, delivery organisations, and even the people who staff them – are viewed as connected though static and predictable mechanisms. The system is seen as non-ada
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5.1 Decision making

Decision making is understood as management's main task. Usually, the model of decision making is described as a perfectly well-organised, rational and logical process. First, the problem is defined. Second, all the relevant information that leads to an optimal solution is collected. Third, reviewing the data, management (perhaps with the help of technocratic ‘experts’) develops several possible solutions. Fourth, evaluating the possible solutions carefully, management makes a decision re
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4 How do organisations become market leaders?

Drucker (1992) wrote:

The five most important questions you will ever ask about your organization [are]:

  • What is our business?

  • Who is our customer?

  • What does our customer consider value?

  • What have been our results?

  • What is our plan?

Can you answer these questions for your own organisation? I don't expect you to know all the answers now. Try to think about them
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Keep on learning

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Learning outcomes

After studying this course, you should be able to:

  • describe accounting's primary objective

  • explain what is meant by inputs to and outputs from the accounting information system

  • explain the relationship between data, data processing, data summarisation and information

  • explain the difference between data and information

  • describe the five main characteristics of 'good' information.


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4 Conclusion

This unit looked at the question of whether the financial markets are efficient in the sense that prices demanded are fair and reflect all known and relevant information about investments. The Efficient Markets Hypothesis defines such efficiency at three levels, depending on how much information is in fact incorporated into prices. The weak form states merely that the current price already reflects all information incorporated into previous prices, so that each successive price move is a reac
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4.3 Net present value

If the NPV is positive, then the aggregate present value of the future cash flows is greater than the price to be paid for the investment today, so the investment is cheap and offers an excess return. If the NPV is negative, then the price to be paid today is greater than the present value of the future cash flows; the investment is therefore overpriced and does not offer an adequate return. If the NPV is zero, we can say the investment is fairly priced by the market.

All significant fi
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3.7 Interest rate risk

This has to be seen in conjunction with the previous comments about the secondary market in shares and debt instruments. An efficient secondary market can ensure that there is always a ready buyer for an investment, but the price at which the investment can actually be sold will depend entirely on market conditions at the time of sale. The secondary market price will not necessarily bear any relation to the price originally paid by the investor. The following example illustrates the general p
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1.1 A note about terminology

We begin with a ‘health warning’ about terminology, this time about the use of the word ‘risk’ in finance.

The difference between the everyday and the specialised meanings of ‘risk’ is less technical and more radical than in the case of ‘return’. In everyday usage, ‘risk’ is negative – the risk of having a car accident or the risk of losing one's job. If we use ‘risk’ in a positive sense at all, it is only as a result of adopting a consciously ironic tone: ‘T
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6.4 Prospect theory

Kahneman and Tversky (1979) developed ‘prospect theory’ to describe this combination of risk and loss aversion. This suggests that whether an individual is risk seeking or risk averse will depend on where they are in relation to a personal reference point. The reference point divides the area where they feel as if they are in loss from the area where they feel they are in gain. This point is not usually zero, and will change over time. For example, a professional financial trader who is p
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5.3 Social institutions

Of course, the extent of agreement about meaning can be highly variable: from the ephemeral (a certain style of clothing may come to stand for a shared attitude among a small group of teenagers for a short period) to the more profound (such as the idea of ‘a market’ or ‘marriage’). Sociologists refer to these more profound shared meanings as institutions. In this sense, an institution is a persistently reproduced social pattern that is relatively self-sustaining. However, to sa
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4.5.2 Anchoring adjustment

Many decisions need revisiting and updating as new information comes available. However, most of us make insufficient anchoring adjustment: this is the tendency to fail to update one's targets as the environment changes (Rutledge, 1993). Once a manager has made an initial decision or judgement then this provides a mental anchor which acts as a source of resistance to reaching a significantly different conclusion as new information becomes available. It is what happens when one has made
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4.4 Using information

Our use of information is often biased in important regards. First, we pay more attention to information that is easily available (the availability heuristic). Second, we overweight memories which are more easily retrievable – usually because they are emotionally vivid or have personal relevance (the retrievability heuristic).

We pay selective attention to information, often in a self-serving way. We will often give greater weight to information which shows us in a favou
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3.2 Utility theory

Utility theory is based on this assumption of rationality and describes all decision outcomes (financial and otherwise) in terms of the utility (or value) placed on them by individuals. Within this framework, decisions can be understood in terms of rationally ordered levels of utility attached to different outcomes.

Bazerman (2001, pp.3–4), for example, describes a formally rational decision process for arriving at a decision with the greatest expected utility in the following terms:<
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1.1 Introducing decision-making

A vast literature on decision making stretches back over several centuries and encompasses a wide range of academic disciplines – from history and literature through to mathematics. This course is not a comprehensive survey of this field. Rather, we have chosen a few key topics that will help you to think in broader ways about how you and others take decisions; we shall also introduce you to some themes in social science which have direct relevance to managerial decision making. In particul
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6.2 Political skills

A project manager will encounter politics – the struggle to acquire and maintain power – on a daily basis, as he or she competes to secure resources and support for their project. This is inevitable, given the probable diversity of backgrounds and expectations of those with an interest in the project. Political skills will be necessary to make deals and resolve conflicts with stakeholders, over whom project managers may have little formal authority. Managing the following aspects needs to
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Keep on learning

Study another free course

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Keep on learning

Study another free course

There are more than 800 courses on OpenLearn for you to
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